Mixed Performance for Malaysian Hotels in 2010

Hotel occupancy levels in Malaysia rose to 70% in 2010 from 62% in 2009, with Kuala Lumpur registering growth in RevPAR, while other cities witnessed a decline in performance, as reported by Horwath HTL in the recently published 2011 Malaysia Hotel Operations Survey.

About 89 hotels across the country participated in the Horwath HTL 2011 Malaysia Hotel Operations Survey, making it one of the most prominent studies of its kind in the Malaysia hotel industry. The survey conducted annually is supported by the Malaysian Association of Hotels, and is used extensively by developers, investors, hotel operators and government agencies.

Hotels across the country reported a growth in occupancy and a general improvement in Income Before Fixed Charges and Management Fees (IBFCMF), but ADR dropped from RM281 in 2009 to RM223 in 2010. This is due to a general decrease in ADR, as well as an increase in participation from hotels in lower rate categories. However, tight cost controls exercised in 2010, particularly in undistributed operation expenses, resulted in a growth in IBFCMF margins from 35% in 2009 to 39% in 2010.

Kuala Lumpur and Petaling Jaya / Subang Jaya / Sepang recorded slight increases in RevPAR, largely driven by growth in occupancy. Other main tourism destinations, such as Penang, Langkawi and Kota Kinabalu, however, reported year-on-year drops in RevPAR by 11% to 15%. The largest IBFCMF margins were seen in Kuala Lumpur and Langkawi, while Kuching offers the leanest margins.

Leisure demand emerged as the most prominent source of business in 2010, contributing 32% to 67% of room nights across the cities. Corporate demand is also strong in the Greater KL area and Penang. Participating hotels reported Southeast Asian markets as the largest regional source, making up about 60% of all room nights in 2010, including the domestic market which accounted for about 43%. Other significant markets include Singapore, Australia and New Zealand, Middle East and China.

“Overall, participating hotels are conservative in their projections for both occupancy and rate increases in 2011, projecting only a 4% and 6% increase respectively,” said Sen Soon-Mun, Director of Horwath HTL Kuala Lumpur.

In 2010, tourist arrivals grew by 4% to a record 24.6 million arrivals, compared to 23.6 million arrivals in 2009. This resulted in total tourism receipts of RM 56.5 billion – a strong 5.8% growth from 2009. The top 10 source countries include regional markets such as India, Korea and China.

See recent travel news from: Travel News Asia, Horwath HTL, RevPAR